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 Conditions for Calculating DSO Locate this document in the navigation structure

 

Depending on the analysis time frame you select in the initial analysis step, the system determines which accounting document line items are taken into account for calculating the different key performance indicators (KPIs), such as DSO, receivables, and revenue.

The following conditions apply for the direct method for calculating DSO:

  • DSO is calculated for those line items that are cleared within the selected time frame (cleared receivables), no matter when they have been posted.

  • Overdue DSO is calculated for those line items that are cleared within the selected time frame and the clearing date is later than the net due date.

The following conditions for calculating other KPIs apply for both the direct and indirect method:

  • Revenue is calculated when a line item has been posted within the selected time frame, no matter when it is cleared.

  • Receivables are the sum of those line items that have been posted before the end of the selected time frame and are open at the end of the time frame. That is, they are not yet cleared or they are cleared after the end of the time frame.

  • Overdue receivables are those receivables that are already overdue or become overdue in the selected time frame.

For those analysis steps that depict a development of the KPIs over time, the KPIs are calculated separately for each month based on the conditions mentioned earlier. That is, the KPIs do not relate to the entire selected time frame, but to each individual month.

In addition, the following conditions apply:

  • For open receivables, “open” relates to the day when the analysis is performed. It does not relate to the end of the analysis time frame. Therefore, open receivables are those receivables that already existed in the selected time frame and are still open today.

  • As explained earlier, for overdue receivables, “overdue” relates to the end of the analysis time frame. However, the analysis step List of Open Items contains a flag that indicates whether a specific line item is overdue. In this case, “overdue” relates to the day when the analysis is performed, and not to the end of the analysis time frame. Therefore, the flag indicates that a line item is overdue today, even if it was not overdue in the analysis time frame.

The conditions described in the preceding paragraphs are depicted in the following figures:

This graphic is explained in the accompanying text.

Time Selection Direct DSO

This graphic is explained in the accompanying text.

Time Selection Indirect DSO